On December 31, 2012, the Board of Directors of Fox Manufacturing, Inc. committed to a plan to

discontinue the operations of its Owl division. Owl's 2012 operating loss was $1,400,000, and the fair

value of its facilities exceeded its carrying value by $500K. During 2013, the year that Owl was actually

sold, Owl generated an operating loss of $350K, and it was sold at a $150K loss. Foxs tax rate is 20%. In

its 2013 Income Statement, what amount should Fox report as loss from discontinued operations?

a.

$400,000

b.

$500,000

c.

$280,000

d.

$120,000

The correct answer is A, I want to know how to caculate. And please explain what is discountinued operation, and how usually how we cacualte Income from Discountinued Operations.